If your business relies on self-financing, you may be limiting its growth and profit potential. Well many business owners fall into the trap, high-interest rate credit cards aren’t the answer for long-term financial needs, as businesses often accumulate high-levels of credit card debt that negatively impact their operations, and lower their credit score substantially.
Let’s say your business is carrying considerable credit card debt, refinancing that credit card debt, with a loan from Lending Loop, is an effective way to both save money and improve your credit score. When you refinance existing high-interest, credit card debt with a Lending Loop loan
Leaving the credit account open, after repayment has been made, is beneficial as it allows you to maintain a low Credit Card Utilization ratio, a metric used by credit rating agencies to determine credit score. Similarly, relying on credit cards to finance your company and maintaining a high credit card utilization percentage can have an adverse effect on your credit score, raising your cost of borrowing over time, and decreasing profit as a result.
If you or your business have relied on self-financing, then a business loan may provide a strategic growth opportunity for larger expenses required by your business. Using a loan has the potential to improve the credit score of your business while allowing you to take on a new project, or increase profits by expanding operations.
While many online lenders offer fast access to capital, they generally have very high APRs – with the exception of Lending Loop, which offers much lower rates than other online lending services and access to capital much quicker than traditional banking services.